The World Trade Organization protests, followed by similar acts around the world, were effective in highlighting the pervasive use of sweatshop labor by American corporations. And now, companies are slowly, slowly changing. But it’s not just giant puppets, high-profile protests, and public embarrassments that are making companies look harder at themselves. Companies are learning that good working conditions mean good business.
Last October, Nike, with the help of the sweatshop group the Worker Rights Consortium and university activists, helped workers at a factory in Puebla, Mexico establish the country’s first independent union for factory workers. Sure Nike was dragged kicking and screaming, but the union happened in large part because Nike allowed it to happen. The cost of retraining workers, moving the factory, and bad publicity was too much for Nike to allow the factory to continue the way it was going.
In El Salvador in 1995, workers who made clothing for JC Penney, Eddie Bauer, and the Gap were fired and beaten for organizing. Intense public outcry around the world forced the American clothing companies to cancel their contracts. The Gap, already used to public pressure at that time, decided to stay at the factory and work on improving the conditions. The Gap learned, as many companies are learning, that it’s extremely expensive to move operations. So the Gap stayed, ignored the public outcry at the time, and hired local religious and academic leaders to form a union and to monitor the new factory requirements. The factory workers are now better off than before because the Gap realized it made good business and media sense.
Besides the immediate costs, corporations are also learning the long-term advantages to good factory conditions. One of the advantages is, obviously, a good public image. According to a poll by Business for Social Responsibility, a group of companies set up to examine global business ethics, 90 percent of the American public wants companies to focus on other things besides profitability. And 49 percent of those polled form an impression of the company based on its social responsibility. Companies are aware of how the public perceives them, and as in the marketplace, often respond to what the public wants. Levi’s, for example, has a high public-approval rating in large part because of its long-term factory efforts. Also, as American companies learned here first, having good factories and increasing wages leads to higher worker productivity and morale.
But improving factory conditions and raising the standard of living is not as simple as it may seem. When corporations like Eddie Bauer and JC Penney cancel their contracts, like they did in El Salvador, the workers get screwed. Every time a factory is closed, or an American company is boycotted in a high-profile protest, the workers suffer.
“The last thing a worker wants is to have their job taken away,” says Charlie Kernaghan of the National Labor Committee. (Kernaghan is somewhat famous for exposing the sweatshops that were producing Kathie Lee Gifford’s clothing line.) One often overlooked reality of globalism is that corporations bring jobs and stimulate the economies of the poorest countries. This doesn’t excuse horrible conditions, low wages, or general exploitation—but it is, like it or not, better than no jobs at all. If a company is boycotted, it means fewer products and fewer jobs. Furthermore, the no-name competing product is likely to have even worse factory conditions. No-name products in no-name factories get a hell of a lot less media and activist scrutiny than those of Nike or the Gap.
It’s true corporations overlook horrible realities in the interest of profit. But there are legit reasons why corporations are slow to increase wages and improve factories. The World Bank and the WTO are correct that suddenly increased cash flow could have negative effects on international economies. As Argentina and the former Soviet Union have shown, economies are unstable. There are economic principles and foreign governments that companies have to grapple with. If companies set up factory monitoring, who will do the monitoring? If companies want to meet or exceed the living wage, how will that wage be determined? What are the standards?
The sweatshop issue is complex and companies are slow to change. But they are changing. Capitalism has no morals, only the appetite to grow. Morality can, however, be an unintended consequence of smart business. The more lefties and activists learn this, the better the strategies will be to deal with globalism. Instead of troops in turtle suits, how about troops steeped in economic theory?